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Rights of First Refusal ?How Long Do They Last?

Q: I purchased three horses two years ago and signed a bill of sale with the seller that said that she has a right of first refusal if I want to sell them. I just lost my job and have to sell the horses. I offered them to the previous owner first, but she did not want to buy them back. The person who is buying the horses from me is worried that the previous owners right of first refusal will continue. How long does a right of first refusal last?

A: Generally speaking, a right of first refusal in a horse sale is a contract term that requires a horses new owner to first offer the horse for sale to the previous owner (and typically on certain terms) if the horses new owner later decides to sell the horse to another person. To avoid uncertainty and confusion, any contract containing a right of first refusal should specify when and if the right of first refusal will terminate, and upon what terms the horses must be offered to the previous owner for purchase.

In your situation, you must look to the bill of sale that contains the right of first refusal to determine whether the former owner has any residual rights now that she has declined to repurchase the horses. If the bill of sale does not specifically state otherwise, the former owner's right of first refusal automatically terminated when she declined to repurchase the horses, and therefore, the new owner will purchase the horses from you free and clear of any claims by the former owner.

To help protect yourself against any disputes that might arise later, you should document your offer to the former owner, and the fact that she declined. For example, you could send the former owner an email containing the offer, and then you would likely have her email reply, which you could then print out and save. You could also send the former owner a fax or letter (with confirmation of delivery). If your contract does not state a time limit within which the former owner must respond, you should specify a reasonable time limit in your offer (e.g., five business days) to avoid undue delay in selling the horses to your new buyer.

About the Author: Rachel Kosmal McCart, the founder of Equine Legal Solutions, is a lifelong horsewoman and experienced lawyer. Equine Legal Solutions, the Legal Counsel with Horse Sense TM , offers a full range of legal services for the horse community, including dispute resolution, customized contracts and risk management assessment.